National Bureau of Economic Research
The National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is well known for providing start and end dates for recessions in the United States.
The NBER is the largest economics research organization in the United States. Many of the American winners of the Nobel Memorial Prize in Economic Sciences were NBER Research Associates. Many of the Chairmen of the Council of Economic Advisers have also been NBER Research Associates, including the former NBER President and Harvard Professor, Martin Feldstein.
The NBER was founded in 1920. Its first staff economist, director of research, and one of its founders was American economist Wesley Mitchell. The Russian American economist Simon Kuznets, and student of Mitchell, was working at the NBER when the U.S. government recruited him to oversee the production of the first official estimates of national income, published in 1934. In the early 1940s, Kuznets' work on national income became the basis of official measurements of GNP and other related indices of economic activity. The NBER is currently located in Cambridge, Massachusetts with a branch office in New York City.
The NBER's research activities are mostly identified by 19 research programs on different subjects and 14 working groups. The research programs are: Aging, Asset Pricing, Children, Corporate Finance, Development of the American Economy, Economics of Education, Economics of Fluctuation Growth, Energy and the Environment, Health Care, Health Economics, Industrial Organization, International Finance and Macroeconomics, International Trade and Investment, Labor Studies, Law and Economics, Monetary Economics, Political Economy, Productivity, and Public Economics. From this research come the NBER's Working Papers.
Nobel Memorial Prize in Economic Sciences winners
Council of Economic Advisers (CEA) Chairmen
In chronological order
Other notable members
The NBER is well known for its start and end dates of US recessions. The NBER uses a broader definition of a recession than commonly appears in the media. The traditional definition of a recession is two consecutive quarters of a shrinking gross domestic product (GDP). In contrast, the NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.". Business cycle dates are determined by the NBER dating committee under contract with the Department of Commerce. Typically, these dates correspond to peaks and troughs in real GDP, although not always so.
The NBER prefers this method for a variety of reasons. First, they feel by measuring a wide range of economic factors, rather than just GDP, a more accurate assessment of the health of an economy can be gained. For instance, the NBER considers not only the product-side estimates like GDP, but also income-side estimates such as the gross domestic income (GDI). Second, since the NBER wishes to measure the duration of economic expansion and recession at a fine grain, they place emphasis on monthly—rather than quarterly—economic indicators. Finally, by using a looser definition, they can take into account the depth of decline in economic activity. For example, the NBER may declare not a recession simply because of two quarters of very slight negative growth, but rather an economic stagnation. However, they do not precisely define what is meant by "a significant decline," but rather determine if one has existed on a case by case basis after examining their catalogued factors which have no defined grade scale or weighting factors. The subjectivity of the determination has led to criticism and accusations committee members can "play politics" in their determinations.
Though not listed by the NBER, another factor in favor of this alternate definition is that a long term economic contraction may not always have two consecutive quarters of negative growth, as was the case in the recession following the bursting of the dot-com bubble."The NBER's Business Cycle Dating Procedure: Frequently Asked Questions". The National Bureau of Economic Research. For example, a repeated sequence of quarters with significant negative growth followed by a quarter of no or slight positive growth would not meet the traditional definition of a recession, even though the nation would be undergoing continuous economic decline.
Announcement of end of 2007–2009 recession
In September 2010, after a conference call with its Business Cycle Dating Committee, the NBER declared that the Great Recession in the United States had officially ended in 2009 and lasted from December 2007 to June 2009. In response, a number of newspapers wrote that the majority of Americans did not believe the recession was over, mainly because they were still struggling and because the country still faced high unemployment. However, the NBER release had noted that "In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle."
- "History of the NBER". The National Bureau of Economic Research.
- "History of Economic Recessions". Politinomist. January 2, 2009.
- Carson, Carol (1975). "The History of the United States National Income and Product Accounts: The Development of an Analytical Tool". Review of Income & Wealth 21 (2): 153–181. doi:10.1111/j.1475-4991.1975.tb00687.x.
- "Major NBER Programs". The National Bureau of Economic Research.
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- "National slowdown dims New England economic outlook". Boston Globe. May 30, 2008.
- "The NBER's Recession Dating Procedure". The National Bureau of Economic Research.
- "The NBER's Business Cycle Dating Procedure: Frequently Asked Questions". The National Bureau of Economic Research.
- "Recession 'over,' but the mood is glum". Buffalo News. September 27, 2010.
- "Economist who called recession's end sees recovery". Investment News. September 28, 2010.
- "CNN Poll: Nearly three-fourths say recession not over". CNN. September 26, 2010.
- "Meaning of word 'recession' varies". Delmarva News. September 28, 2010.
- "Editorial: Too early to say recession has run its course in U.S.". The Daily Republic. September 28, 2010.
- "Business Cycle Dating Committee, National Bureau of Economic Research". National Bureau of Economic Research. September 20, 2010.